[2010] FWAFB 9832 [2010] FWAFB 9832 Download Word Document The attached document replaces the document previously issued with the above code on 21 December 2010. The Decision has been corrected by deleting the words “FW Act” appearing in paragraphs [21] , [22] and [23] and inserting “WR Act”. Lisa Powell Associate to Senior Deputy President Acton Dated 9 June 2011 [2010] FWAFB 9832 FAIR WORK AUSTRALIA DECISION Fair Work Act 2009 s.604 - Appeal of decisions Workplace Relations Act 1996 s.120 – Appeal of decisions Alcoa Australia Rolled Products Pty Limited v The Australian Workers' Union and others (C2010/5394) SENIOR DEPUTY PRESIDENT ACTON SENIOR DEPUTY PRESIDENT CARTWRIGHT COMMISSIONER SMITH MELBOURNE, 21 DECEMBER 2010 Appeal against decision [ [2010] FWA 5674 ] and determination [ PR503304 ] of Commissioner Lewin at Melbourne on 8 October 2008 and 27 October 2010 in matter numbers C2009/10666, C2009/10669, B2009/10749 and B2009/10750. Introduction [1] Alcoa Australia Rolled Products Pty Limited (Alcoa) lodged a notice of appeal on 29 October 2010 against a decision of Commissioner Lewin of 8 October 2010. 1 On 3 November 2010, Alcoa lodged an amended notice of appeal against the decision of 8 October 2010 and a determination of the Commissioner of 27 October 2010. 2 [2] The decision and determination concerned the following applications made to Fair Work Australia (FWA) in October 2009. [3] C2009/10666 - An application by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) for Fair Work Australia to deal with a dispute over clause 8 - Rates of Pay of the Alcoa Australia Rolled Products - Point Henry Agreement 2006 3 (the Alcoa Agreement) in accordance with the dispute resolution procedure in the Alcoa Agreement. [4] C2009/10669 - An application by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (AMWU) for Fair Work Australia to deal with a dispute over clause 8 - Rates of Pay of the Alcoa Agreement in accordance with the dispute resolution procedure in the Alcoa Agreement. [5] B2009/10749 - An application by The Australian Workers’ Union (AWU) for an order under s.472 of the Fair Work Act 2009 (Cth) (the FW Act) in relation to partial work bans. [6] B2009/10750 - An application by the AWU for an order that Alcoa cease deducting money from the wages of AWU members for partial work bans and refund all money deducted from the wages of AWU members in relation to partial work bans. [7] The applications were associated with deductions Alcoa had made from the wages of their employees in alleged reliance on s.471 of the FW Act. Section 471 of the FW Act deals with payments relating to partial work bans that are protected industrial action. Provided certain requirements are met, s.471 allows an employer to reduce an employee’s payments by a specified portion or to withhold payments altogether where the employer refuses to accept partial performance. [8] The Alcoa Agreement is a “union collective agreement” made pursuant to s.328 of the Workplace Relations Act 1996 (Cth) (WR Act) as amended by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (Work Choices Act). [9] Clause 27 of the Alcoa Agreement concerns the resolution of disputes and is as follows: “ 27. Resolution Of Disputes (a) The Company and the employees recognise the importance of uninterrupted production and supply to customers and agree that conciliation is the most satisfactory means to resolve matters. Accordingly, the Company and the employees agree to discuss issues exhaustively with the outcome being determined on the facts, logic and merit involved. (b) Consistent with the intent of sub clause (a) hereof, the Company and the employees agree to process any grievances or other matters in dispute in accordance with the following procedure. (i) The matter will first be discussed between the employee and his or her team or immediate supervisor. At any time throughout the resolution of disputes process, an employee may chose to be represented by an employee representative of his or her choice. (ii) If not settled, the matter will be submitted by the employee or appropriate employee representative to the Departmental Manager or his or her designated representative. (iii) If not settled, the matter will be automatically referred to the HR/IR Manager who will seek its resolution through discussions with the employee and his or her designated Representatives. (iv) Where the employee has elected to be represented by an employee representative, the Company will reserve the right to discuss the matter with State and or Federal Officials of the employee representative’s organisation concerned at any stage. (v) If the matter cannot be settled through this mechanism, it will then be referred to the Australian Industrial Relations Commission for conciliation or arbitration. (vi) If the AIRC cannot hear the matter because it is outside its jurisdiction then the Company and the employee(s) agree that the matter will be referred to an impartial third party to be jointly appointed by the parties. The third party may be a member or former member of the Commission or a former Judge or other prominent person capable of providing a practical solution, or a Disputes Panel. (vii) On referral, the mediator shall endeavour to resolve the dispute between the parties, the mediator may arbitrate the matter with the agreement of the parties. (c) Until the matter is determined in accordance with the above procedure, work will continue normally and without prejudice as to final settlement of the matter. All Parties to this Agreement will take all possible action to settle any dispute within fourteen days of its notification to the Departmental Manager pursuant to paragraph (b)(ii) above. (d) (i) In the event of an employee being given summary dismissal in accordance with paragraph 6(b)(vi) of this Agreement, the Company will notify the appropriate employee representative, if requested by the employee, as soon as possible. (ii) The Union will formally notify the HR/IR Manager if it is contended there are reasons why the dismissal is inappropriate. In these circumstances, the employee will continue to receive normal pay and entitlements until the matter is determined in line with the processes set out in this Clause. The continuation of pay and entitlements will be on the condition that no industrial action is taken over the matter and that legitimate attempts are being made to resolve the matter expeditiously.” [10] There is no dispute between the parties that ss.709-712 of the WR Act, rather than s.170LW of the WR Act prior to its amendment by the Work Choices Act, are relevant to the resolution of disputes under clause 27 of the Alcoa Agreement. [11] Sections 709-712 of the WR Act are as follows: “ 709 Application (1) A person may apply to the Commission to have a dispute resolution process conducted by the Commission under this Division in relation to a matter or matters in dispute if: (a) the dispute is one that, under the terms of a workplace agreement, may be resolved using a dispute resolution process conducted by the Commission; and (b) any steps that, under the terms of agreement, must be taken before the matter is referred to the Commission have been taken. (2) An application to have a dispute resolution process conducted by the Commission under this Division must: (a) be in the form (if any) prescribed by the regulations; and (b) describe the matter, or matters, in dispute in relation to which the dispute resolution process is to be conducted; and (c) be signed by the party to the dispute on that matter or those matters who is making the application; and (d) specify that the dispute resolution process is to be conducted under the terms of a workplace agreement and not under the model dispute resolution process. (3) The Commission may request the parties to provide further information about: (a) the matter or matters in dispute; and (b) the steps that have been taken to resolve the dispute. Note: Under section 353, a workplace agreement must include a dispute resolution process. That process may be something other than the model dispute resolution process, and may involve applying to have the Commission conduct an alternative dispute resolution process. 710 Grounds on which Commission must refuse application The Commission must refuse to conduct a dispute resolution process under this Division in relation to a matter in dispute if: (a) the dispute is not one that, under the terms of the workplace agreement, may be resolved using a dispute resolution process conducted by the Commission; or (b) any of the steps that, under the terms of agreement, must be taken before the matter is referred to the Commission have not been taken; or (c) the matter is the subject of proceedings or has already been settled as a result of proceedings, whether before a court or another body, under a law of the Commonwealth or of a State or Territory relating to the prevention of discrimination or to equal opportunity. 711 Commission’s powers (1) In conducting the dispute resolution process under this Division, the Commission has, subject to subsection (2), the functions and powers: (a) given to it under the workplace agreement; or (b) otherwise agreed by the parties. (2) The Commission does not have the power to make orders. (3) The Commission must, as far as is practicable, act: (a) quickly; and (b) in a way that avoids unnecessary technicalities and legal forms; and (c) if the parties have agreed, either in the workplace agreement or otherwise, that an aspect of the process is to be conducted in a particular way—in accordance with that agreement. (4) Subdivision B of Division 4 of Part 3 of this Act does not apply in relation to the conduct of the dispute resolution process by the Commission under this Division. 712 Privacy (1) The Commission must conduct the dispute resolution process in private. (2) The Commission must not disclose or use any information or document that is given to the Commission in the course of conducting the dispute resolution process to any person, unless: (a) the information or document is disclosed or used for the purpose of conducting the process; or (b) the parties to the process consent to the disclosure or use; or (c) the information or document is disclosed or used in circumstances specified in regulations made for the purposes of this paragraph; or (d) the disclosure or use is otherwise required or authorised by law. (3) Evidence of anything said, or any act done, in the dispute resolution process is not admissible in any proceedings relating to the dispute: (a) in any court; or (b) before a person authorised by a law of the Commonwealth or of a State or Territory to hear evidence; or (c) before a person authorised by the consent of the parties to hear evidence; unless: (d) the parties agree to the evidence being admissible; or (e) the evidence is admitted in circumstances specified in regulations made for the purposes of this paragraph.” [12] Alcoa, at least, also maintains s.353 of the WR Act is relevant to the nature of the disputes that can be dealt with by the tribunal pursuant to clause 27 of the Alcoa Agreement. Section 353 of the WR Act is as follows: “ 353 Workplace agreement to include dispute settlement procedures (1) A workplace agreement must include procedures for settling disputes ( dispute settlement procedures ) about matters arising under the agreement between: (a) the employer; and (b) the employees whose employment will be subject to the agreement. (2) If a workplace agreement does not include dispute settlement procedures, the agreement is taken to include the model dispute resolution process mentioned in Part 13.” [13] Alcoa challenged the tribunal’s jurisdiction to deal with the applications. The jurisdictional challenge was mounted essentially on the basis that the disputes related to the application of s.471 of the FW Act concerning payments relating to partial work bans and the resolution of such disputes involves the exercise of judicial power. Alcoa further maintained the disputes were not about matters arising under the Alcoa Agreement as required by s.353 of the WR Act. 4 [14] Alternatively, Alcoa said that even if the disputes were ones that, under the terms of the Alcoa Agreement, may be resolved using a dispute resolution process conducted by the tribunal, the tribunal could not conduct the dispute resolution process because the steps that, under the terms of the Alcoa Agreement, must be taken before the disputes are referred to the tribunal had not been taken. 5 Commissioner’s decision [15] In his decision on the union applications, the Commissioner said in respect of the tribunal’s jurisdiction: “ [24] On 16 October 2009, the applicant unions filed Submissions in the Tribunal addressing the issues of jurisdiction and indicating that the Tribunal should proceed to determine if the conditions precedent to making proportional reductions in payments due under the Agreement had been met pursuant to s.471 of the Act, prior to the determination of applications for orders pursuant to s.472 of the Act, as disputes concerning the proper application of the terms of the Agreement. In the circumstances I treat the AWU submissions as an application for the Tribunal to exercise the dispute settlement function assigned to it under the Agreement. [25] The applications were relisted for Mention and Programming and to determine a jurisdictional issue on 27 November 2009. During the Hearing on 27 November 2009, I decided that Fair Work Australia has the jurisdiction to deal with the alleged dispute as a dispute over the application of the terms of the Agreement which is discussed further in detail below... Nature of the dispute [34] The subject matter of the alleged dispute is the requirement to pay wages and other amounts prescribed by the Agreement where employees have engaged in protected industrial action comprised of partial work bans. Alcoa made reductions in payments due to employees under the Agreement in respect of the protected industrial action, including in respect of partial work bans... A dispute about the application of the terms of the Agreement - Jurisdiction [41] The jurisdictional issue arising in relation to the dispute can be addressed as follows: Is the dispute properly characterised as a dispute to which the dispute settlement procedures of the Agreement apply, and, having regard to the provenance of the Agreement under the WR Act and the consequences of the Fair Work (Transitional Provisions & Consequential Amendments) Act 2009 (the Transitional Act), one which the Tribunal can deal with under s.170LW of the WR Act... [43] Alcoa submits that to determine whether or not the statutory requirements of s.471 of the Act have been met, so as to affect the operation of the terms of the Agreement in respect of an employee’s entitlement to payment as prescribed by the Agreement, is a judicial function. In essence, they submit, the dispute between the parties is not the proper application of the terms of the Agreement governing the company’s obligation to make payment of wages and other amounts to employees in the relevant circumstances. Rather, they say, the dispute concerns the rights, duties and obligations of Alcoa and its employees arising under the operation of s.471 of the Act. The determination of this dispute, it is said, is exclusively a judicial function. Alcoa therefore submits that the dispute is not subject to the dispute settlement terms of the Agreement and not a dispute arising under the Agreement concerning the application of its terms, as provided for by s.170LW of the WR Act. [44] On 27 November 2009, I rejected this submission and proceeded to hear evidence of the circumstances under which the authorised protected industrial action occurred and what actions were taken by Alcoa to meet the statutory requirements of s.471(1) of the Act, so as to affect the operation and application of the relevant terms of the Agreement as to payment of wages and other amounts. Reason for decision—Jurisdiction [45] On 27 November 2009 when I announced my view that the Tribunal has Jurisdiction to deal with the dispute, I did so summarily. I stated that should that decision be challenged on appeal by Alcoa I would provide extended reasons for my conclusion as soon as possible. No appeal was filed and no request for extended reasons was received. I also stated that I would provide more extended reasons in due course when determining the dispute, which I now do in accordance with the dispute settlement provisions of the Agreement, in particular clause 27(b)(v) of the Agreement. [46] Section 471 of the Act provides that, where certain conditions precedent are met, a modern award, enterprise agreement, or contract of employment is affected in a certain way. Namely, to authorise proportional reductions of amounts otherwise payable to employees by force of the relevant terms of, in this case, the Agreement. It seems a reasonable approach to the dispute to assume that the application of the terms of the Agreement may or may not be affected by the existence of those conditions precedent in the particular circumstances of an employee who is said to have engaged in protected industrial action, which is a partial work ban within the meaning of the Act. That will depend on a number of relevant facts. [47] If an employee has not engaged in protected industrial action comprised of a partial work ban the terms of the Agreement will not be affected by any notice which an employee may have been given under s.471 of the Act. If the employee has engaged in protected industrial action which is a partial work ban within the meaning of the relevant statutory provisions and has not been given a notice as required by those provisions, or s.471(4)(c) of the Act the terms of the Agreement will apply unaffected by the statutory provisions. [48] There is a difference of some significance between the nature of ss.470 and 471 of the Act. Section 470 is a statutory prohibition on making payments to an employee and is directed solely at the legal obligations of an employer in particular factual circumstances. Those provisions do not apply to protected industrial action which is a partial work ban. Section 471 of the Act is directed at effects upon the terms of an enterprise agreement (among other things) which creates reciprocal rights between an employer and an employee in relation to proportional payments for the part performance of work defined as a partial work ban. [49] An employee who is subject to an enterprise agreement could reasonably seek to invoke the dispute settlement provisions of the Agreement in relation to disputed facts concerning; whether the employee engaged in protected industrial action on a day; whether the employee engaged in a partial work ban within the meaning of s.471 of the Act; whether the employer gave the employee a written notice; whether that notice stated that, because of the ban the employees’ payments would be reduced; whether those payments would be reduced by a proportion and/or whether the proportion was specified and, if so, in the notice given to the employee, whether the reductions were in fact the proportional reductions in payments due as specified in the notice, whether the proportional reductions were worked out in accordance with the Act as required by s.471(3) thereof. The essence of the dispute in this case is, as a matter of fact in the relevant circumstances of each employee, whether the operation of the terms of the Agreement has been affected by the actions of various employees in relation to partial work bans, the actions of Alcoa in relation to partial work bans imposed by those employees and the operation of s.471 of the Act so as to only require a proportion of the payments prescribed by the agreement for work partially performed under the Agreement... [53] When the Tribunal deals with a matter under s.170LW of the WR Act it does so as a private arbitrator of the legal rights, duties and obligations of the parties to an enterprise agreement... [55] When exercising an arbitral function conferred upon it by the parties under a dispute settlement procedure of an Agreement, concerning the application of the terms of an agreement, the Tribunal may be required to consider the effect of a statutory term which has a legal effect upon the operation of the terms of the Agreement, in order to conduct a private arbitration of the legal rights, duties and obligation of the parties to the Agreement... [58] By force of the provisions of s.471 of the Act, as emphasised previously, the clear intention of the parliament is to affect the operation of the terms of an enterprise agreement in relation to an employee. A dispute over the operation of the terms of the Agreement, however arising, is a dispute to which the dispute settlement provisions of the Agreement and the relevant statutory authority afforded the Tribunal under s.170LW of the WR Act to deal with such disputes both apply.” Conclusion [16] It is apparent from the Commissioner’s reasoning that he decided he had jurisdiction to deal with the applications made by the unions because they concerned disputes in respect of which clause 27 of the Alcoa Agreement and the statutory authority afforded the tribunal under s.170LW of the WR Act prior to its amendment by the Work Choices Act applied. [17] Section 170LW of the WR Act prior to its amendment by the Work Choices Act was as follows: “ 170LW Procedures for preventing and settling disputes Procedures in a certified agreement for preventing and settling disputes between the employer and employees whose employment will be subject to the agreement may, if the Commission so approves, empower the Commission to do either or both of the following: (a) to settle disputes over the application of the agreement; (b) to appoint a board of reference as described in section 131 for the purpose of settling such disputes.” [18] We agree with the parties that it is ss.709-712 of the WR Act, rather than s.170LW of the WR Act prior to its amendment by the Work Choices Act, which is relevant to the resolution of disputes under clause 27 of the Alcoa Agreement. [19] As previously outlined, s.709(1)(b) of the WR Act provides that a person may only apply to the tribunal to have a dispute resolution process conducted by the tribunal under Division 5 of Part 13 of the WR Act, which contains ss.709-712, in relation to a matter or matters in dispute if: “(a) the dispute is one that, under the terms of a workplace agreement, may be resolved using a dispute resolution process conducted by the Commission; and (b) any steps that, under the terms of agreement, must be taken before the matter is referred to the Commission have been taken .” (Underlining added) [20] Section 710(b) of the WR Act provides that the tribunal must refuse to conduct a dispute resolution process under Division 5 of Part 13 of the WR Act in relation to a dispute if: “(a) the dispute is not one that, under the terms of the workplace agreement, may be resolved using a dispute resolution process conducted by the Commission; or (b) any of the steps that, under the terms of agreement, must be taken before the matter is referred to the Commission have not been taken ”. (Underlining added) [21] Alcoa maintained before the Commissioner that the steps referred to in ss.709(1)(b) and 710(b) of the WR Act had not been undertaken in respect of the applications before him. [22] There is nothing in the Commissioner’s reasoning to indicate that in deciding he had jurisdiction to deal with the applications of the unions he considered the matters in ss.709(1)(b) or 710(b) of the WR Act. [23] The Commissioner’s failure to consider the matters in ss.709(1)(b) or 710(b) of the WR Act in deciding he had jurisdiction to deal with the applications of the unions, because they concerned disputes in respect of which clause 27 of the Alcoa Agreement applied, constitutes an error of law. [24] In the circumstances, we grant leave to appeal, uphold the appeal and quash the Commissioner’s decision of 8 October 2010 6 and determination of 27 October 2010. 7 We remit the applications of the unions, being C2009/10666, C2009/10669, B2009/10749 and B2009/10750, to Commissioner Smith to deal with according to law. An order to this effect is being issued at the same time as this decision. 8 SENIOR DEPUTY PRESIDENT Appearances : M. McDonald , senior counsel, with J. Forbes , counsel, for Alcoa Australia Rolled Products Pty Limited. K. Farouque , solicitor, for The Australian Workers’ Union, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU). Hearing details: 2010. Melbourne: December, 16. 1 Endnotes : The Australian Workers’ Union and others v Alcoa Australia Rolled Products Pty Limited , [2010] FWA 5674 . 2 The Australian Workers’ Union and others v Alcoa Australia Rolled Products Pty Limited , PR503304 . 3 AC304130. 4 Submissions of Alcoa Australia Rolled Products Pty Limited on Jurisdiction dated 28 October 2009. 5 Ibid. 6 The Australian Workers’ Union and others v Alcoa Australia Rolled Products Pty Limited , [2010] FWA 5674 . 7 The Australian Workers’ Union and others v Alcoa Australia Rolled Products Pty Limited , PR503304 . 8 Alcoa Australia Rolled Products Pty Limited v The Australian Workers’ Union and others , PR505279 . Printed by authority of the Commonwealth Government Printer <Price code C,  PR505278>